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American International Group Inc. said Friday in a regulatory filing that it will pay new Chief Executive Robert Willumstad a base salary of $1 million, and also set lucrative annual bonus and incentive pay targets.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ named Willumstad to the CEO role last month, replacing Martin Sullivan, who had served as CEO for 3 years.

Willumstad, a former Citigroup executive, who had already been chairman of the world’s largest insurer, took over as CEO after ÌìÃÀÍøÕ¾´«Ã½´«Ã½ posted two consecutive quarters of record losses on subprime mortgage investments.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ said Willumstad’s target annual cash bonus was set at $8 million, and his target for annual long-term incentive pay was set at $13 million.

For 2008, Willumstad’s minimum annual cash bonus will be $4 million, which will be deferred until he is no longer employed by ÌìÃÀÍøÕ¾´«Ã½´«Ã½, the company said in the filing with the U.S. Securities and Exchange Commission.

Willumstad is also to receive a one-time $24.5 million restricted stock award, to vest over four years, among other benefits.

(Reporting by Lilla Zuill and Jonathan Stempel, editing by Gerald E. McCormick)

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